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Pros and Cons of a Pocket Listing

By Thomas Mitchell

A pocket listing is a home for sale that is not entered in any Multiple Listing Service(MLS). MLS systems are databases that agents and brokers use to inform each other of listings that are available for sale in their local area. There are thousands of MLS systems throughout the country, providing agents with the platform to market their listings to other agents, and also stay informed on other properties for sale. This allows them to better serve their clients. The main purpose of an MLS is to encourage cooperation between agents, as placing a home listing in MLS will broadcast that information to every local agent who subscribes to the system. In turn, this eases the real estate experience for both buyers and sellers, as the access to a constantly-updated pool of property information makes it more likely that agents can connect the right buyer with the right property (and seller).

Which makes a pocket listing a bit of an outlier. As a property sold outside of any MLS system, the chances of it being seen by the larger public is significantly reduced. If you are looking to sell your home as a pocket listing you should know there are both positive and negative attributes to selling your home as a pocket listing. Let's look at some of these attributes.

When a property is listed on the MLS it has the potential to be marketed to a much higher number of customers than if it was pocket listed. It will show up on the MLS of every real estate who belongs to it and through them, their many potential clients. When a house is on the MLS it can be marketed by way of open houses, broker tours, and internet sites that feature MLS data.

When a property is sold offhand as a pocket listing, it is usually marketed by a single agent, to a single person (or entity), or a group of a select few clients. As there is no public marketing done for a pocket listing, most real estate agents won't even know if their fellow agent has an off-MLS listing. Most pocket listings take place because the seller is someone of note (athlete, politician, judge, celebrity, etc), and they wish to keep their sale private (which also keeps photos and other details of the home off of MLS websites). In this case, there's an obvious advantage to using a pocket listing, with greater privacy and control over the type of audience that sees your property.

There are some negative aspects to selling your home as a pocket listing, if you are an average citizen. A listing off the MLS will not receive nearly the amount of exposure that it would if it were on the MLS. Because of this, the seller is not likely to receive as many offers (and buyer competition for your home can lead to a higher sale price). If too many homes in one area are managed as pocket listings, it can skew the appraisal values for other people trying to sell their homes. And as the lower visibility means a smaller pool of potential buyers, it may take longer to sell the home.

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